Published 6:06 am, Wednesday, August 6, 2014

Eyes downcast, his brow fallen, Scottish Nationalist Party leader Alex Salmond consulted his notes as he was battered by questions from an unexpectedly feisty Alistair Darling on what currency the new country would use in a live TV debate Tuesday night (video below).

You can see it on Salmond's face: he stares into space, mouth open, gasping for air — or at least inspiration — while trying to think of an answer.

This was the moment Salmond finally realized that the currency question would doom his chances of winning the Scottish independence referendum on Sept. 18.

"You can't tell us what currency we'll have!" said Darling, leader of the "Better Together" campaign.

"Aw, I can't ..." Salmond appears to say, almost drowned out by a roar from the audience.

The moment ought to doom the entire independence vote.

Salmond might also have been trying to say "I can." It's not clear from the audio. Even so, Salmond doesn't finish the thought and goes on to argue for the British pound instead, which is the weakest part of the case for Scottish independence.

You can't be a strong, viable country without a strong, viable currency. Scotland hasn't got one, and it won't get one in the future either.

The biggest issue — the economic factor on which the whole independence referendum hinges — is what currency will the new country use?

The first option leaves Scotland dependent on the whims of the Bank of England for interest rates and monetary policy (the exact opposite of independence in many ways). The second exposes Scotland to the risk of bank runs and devaluation like that faced by Iceland in the post-2007 financial crisis.

Salmond's failure on the currency issue left most people with the impression that he had lost Tuesday night's debate. As The Telegraph put it:

Alex Salmond’s campaign for Scottish independence suffered a major setback after he lost the first referendum TV debate on Tuesday night and was booed by the audience for repeatedly refusing to name his Plan B currency.

Darling: "Any 8-year-old can tell you the flag of the country, the capital of a country, and its currency. Now I presume the flag's the Saltire, I assume our capital will still be Edinburgh, but you can't tell us what currency we'll have. What's an 8-year-old going to make of that?"

Salmond: "Aw, I can't ... Alistair, we'll keep the pound because it belongs to Scotland as much as it belongs to England. It's our pound as well as your pound."

The first minister adds that keeping the pound is “best for Scotland and best for the rest of the United Kingdom.”

You don’t have a central bank, says Darling. It would be in another country and the financial services in an independent Scotland would be at risk. “Remember, the financial markets are listening,” he adds.

At another point in the debate, Darling argued that keeping the pound would leave Scotland economically dependent on Britain:

Darling: "It seems to me a bit like getting a divorce and keeping the same joint bank account. If you do that, you've got to get agreement, and the other side are saying no. So it won't happen. What's Plan B?

Salmond: "We'll keep the pound Alistair because it's our pound as well as England's pound."

You can see that and other debate highlight on the video below. Skip to 2:45 for the "Plan B' moment: